Axis Bank Q4 results: Sharp drop in provisions helps lender beat profit estimates

MUMBAI: Axis Bank today reported a net profit of Rs 2,677 crore for the quarter ended March as against a net loss of Rs 1,387.8 crore in the year-ago quarter. The lender’s net profit was higher than even the most optimistic of analysts’ estimates.

The bank’s net interest income in the quarter jumped 11 per cent year-on-year (YoY) to Rs 7,555 crore, which was largely in-line with analysts’ estimates.

The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth.


The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth. The growth in loan was led by corporate loans, which grew 16 per cent on-year, whereas retail loans rose 11 per cent in the reported quarter.

The lender’s asset quality also showed improvement during the quarter as net non-performing assets ratio fell 14 basis points sequentially to 1.05 per cent. For the quarter, the lender’s specific loan-loss provisions were at Rs 7,038 crore as against Rs 4,204 crore in the year-ago quarter.


During the quarter, the Axis Bank made additional provisions of Rs 803 crore on account of change in NPA provision rates on loans to the commercial banking segment, the lender said. The lender’s credit cost also came down sharply to 1.21 per cent for the quarter as against 2.77 per cent a year ago.

The bank said that its overall capital adequacy ratio stood at 19.12 per cent including the Common Equity Tier I ratio of 15.4 per cent. It said that COVID-related provisions of Rs 5,012 crore provided an additional cushion of 69 basis points.

Axis Bank’s operating performance was strong as operating profit jumped 17 per cent year-on-year to Rs 6,865 crore in the reported quarter.

The lender’s top line was affected by a strong quarter for the non-interest bearing functions. Fee income in the quarter grew 15 per cent on-year to Rs 3,376 crore, which helped non-interest income rise 17 per cent on-year to Rs 4,668 crore.

For the financial year, the lender’s net profit more than quadrupled to Rs 6,588 crore, while its net interest income rose 16 per cent to Rs 29,239 crore.

Shares of Axis Bank ended 0.1 per cent higher at Rs 700.9 on the National Stock Exchange.